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Wednesday, February 01, 2006

DID YOU MISS THE SALES TAX DEDUCTION?

The Treasury Department is reporting that many taxpayers who could have benefited from deducting state and local sales taxes did not do so on their 2004 federal income-tax returns. The deduction allows taxpayers to choose to deduct either their state and local income taxes or their sales taxes. In calculating the deduction, taxpayers can use their actual receipts, or they can figure the amount using Internal Revenue Service tables, plus the actual taxes they paid on motor vehicles, boats and certain other items. It is estimated that 1.1 million taxpayers were eligible to take the deduction, but did not.

Thefore, make sure you take the deduction on your 2005 return, and if you were eligible to take it on your 2004 return but did not, it is not too late to file an amended return to obtain a refund of tax.

The deduction has not been renewed by Congress for 2006, but there is hope that Congress may act to extend it.





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